How to open an offshore company in Cyprus?

Cyprus is a free market economy jurisdiction with the lowest income tax in the EU and a liberal tax system.

The Republic of Cyprus is not offshore and is on the OECD white list, which includes states that meet the highest tax standards in the world. This is explained by the fact that in offshore zones only residents who work within the country pay taxes and are exempt from the same ones working outside the state. And since there is no full tax exemption in Cyprus, and Cypriot companies pay a 10% income tax, Ukrainian legislation classifies Cypriot companies as full participants in international business that do not have the characteristics of offshore zones.

Tax incentives for offshore companies:

• registration of companies in Cyprus provides an opportunity to take advantage of low corporate income tax - 12.5%;
• taxation of Cypriot companies does not affect incoming dividends;
• taxes in Cyprus on passive income of non-residents - shareholders, holders of licenses and loans are reduced to zero;
• Cyprus does not provide for taxation on income received from capital gains.

As you can see, taxation in Cyprus is quite loyal for businessmen. The fact of the presence of a large number of signed agreements on the avoidance of double taxation is also important. This makes registering a company in Cyprus an ideal offshore solution.

The shareholder of a Cypriot company can be both an individual and a legal entity, a resident of any country. The director of the company, unlike the shareholder, must be a resident of Cyprus. In the event that the company has several directors, the majority of directors must be residents of Cyprus.

Also, it is mandatory to have a company secretary, who can be both an individual and a legal entity. The secretary must be a resident of Cyprus. Offshore Cyprus is characterized by certain socially significant benefits:

• Cyprus - located at the crossroads that connect Europe with the Middle East and Africa;
• the service delivery system is professionally developed and continues to improve;
• modern offshore legal infrastructure.

If we consider how Cyprus differs from offshore zones, we can name the following factors: all resident companies must pay taxes, undergo an annual audit, and provide financial statements. Another difference from the pre-existing Cypriot offshore companies is the transparency of Cypriot companies. All information about the shareholders and directors of the companies is open and, accordingly, is in the public domain.

All this makes Cypriot companies prestigious corporate instruments that are recognized all over the world. A company registered in Cyprus can easily prove the legitimacy of the origin of its capital when making investments in developed countries. This is a significant advantage over offshore companies.

Thus, for many entrepreneurs who want to register offshore, Cyprus is one of the first jurisdictions to which attention is drawn.